National Independent Automobile Dealers Association
Serving Quality Independent Automobile Dealers Since 1946

Washington Update





LEGISLATIVE REPORT BY Sante Esposito



ELECTION IMPACT

At press time, the full impact of the November elections on the legislative process was still unclear, as Congress deals with a unique situation in which the traditional model of government seems to have changed.

On the positive side, when it comes to issues like reining in the CFPB, fending off efforts to ground recalled vehicles, supporting small business, etc., a Republican administration coupled with a Republican Congress is the best political scenario for NIADA.

President-elect Donald Trump campaigned on repealing the Dodd-Frank Act, thereby dismantling the Consumer Financial Protection Bureau. If that is pursued a likely outcome is that the Democrats will push back and accept many of the CFPB reforms proposed in Rep. Jeb Hensarling’s (R-Texas) Financial CHOICE Act, making the bureau subject to the annual appropriations process, replacing the single director with a five-member commission versus an executive director, revoking the 2013 auto finance guidance and more.

With a coming change of party in the White House, Congress is expected to punt on the major legislative items, including S.2663, the Reforming CFPB Indirect Auto Financing Guidance Act, which would rescind the aforementioned 2013 guidance, during the lame duck session. The only must-pass bill is the continuing resolution to fund the government, likely until early next year.

SALES OF RECALLED VEHICLES

While Senate action on motor vehicle recalls is unlikely before the new Congress begins, NIADA continues to work with NADA, NAAA and other stakeholders and interested parties to ensure the issue is not raised in legislation during the lame duck session.

COMMITTEE LEADERSHIP

With the new Congress set to begin this month, the House committees have been busy electing their leaders for the upcoming session. Two committees will have new chairmen – Appropriations, which will be headed by Rep. Rodney Frelinghuysen (R-N.J.), and Energy and Commerce, to be led by Rep. Greg Walden (R-Ore.).

Both of those committee have jurisdiction over issues important to NIADA. Other important committee chairs include Hensarling of Financial Services, Rep. Bill Shuster (R-Pa.) of Transportation and Infrastructure, Rep. Steve Chabot (R-Ohio) of Small Business and Rep. Mac Thornberry (R-Texas) of Armed Services.

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REGULATORY REPORT BY Shaun Petersen


CONSUMER FINANCIAL PROTECTION BUREAU

Sales and production incentives guidance: In the wake of the recent Wells Fargo scandal, the CFPB issued a guidance document warning financial institutions that creating incentives for employees and service providers to meet sales and other business goals can lead to consumer harm if not properly managed.

The guidance documents offers examples of unfair, deceptive or abusive practices that could result from unchecked incentives, such as opening accounts without consent, misrepresenting benefits of products and steering consumers towards less favorable products or terms.

Click here to view the document.

Debt collection lawsuit: The CFPB and New York attorney general filed a lawsuit in federal court against several companies and individuals the regulators allege were engaged in a debt collection scheme.

The lawsuit alleges the individuals operate a network of companies that harass, threaten and deceive millions of consumers across the nation into paying inflated debts or amounts they might not owe, falsely threatened legal action against consumers and falsely impersonated law-enforcement officials, government agencies, and court officers.

CFPB seeks rehearing: The CFPB has formally requested the entire Court of Appeals for the D.C. Circuit rehear the decision in PHH Corp case, in which the court ruled the structure of the CFPB was unconstitutional.

In addition, 21 current and former members of Congress, including Sen. Elizabeth Warren (D-Mass.), Rep. Nancy Pelosi (D-Calif.) and former Rep. Barney Frank (D-Mass.) also filed a petition asking the entire court to rehear the case.

PHH Corp has the opportunity to respond to the request before the court makes a determination on whether it will grant the CFPB’s request.

FEDERAL COMMUNICATIONS COMMISSION

Robotext enforcement: The FCC released an enforcement advisory reaffirming that text messages are regulated as telephone calls under the federal Telephone Consumer Protection Act. The TCPA requires "prior express written consent" for text messages used for advertising/soliciting and "prior express consent" for other types of text messages.

Under the TCPA, “the term automatic telephone dialing system” or “autodialer” covers any equipment that has the capacity to store or produce numbers to be dialed and dial them without human intervention – but it does not need to have the present ability to do so. Under that provision, the FCC reiterated its position that the TCPA prohibits autodialed calls or text messages, as well as prerecorded calls, unless made with the prior express consent of the called party, to any telephone number assigned to a cellphone or other mobile device, unless the calls or text messages are made for emergency purposes; free to the end user and have been exempted by the FCC, subject to conditions prescribed to protect consumer privacy rights; or made solely to collect debts “owed to or guaranteed by the United States.” The FCC reminded businesses that contact consumers with an automated text message and claim they have prior express consent that they will need to prove they have consent.

The advisory specifically states, “The fact that a consumer’s wireless number is in the contact list of another person’s wireless phone does not, by itself, demonstrate consent to receive robotexts.”

The advisory said callers who inadvertently dial a reassigned number are not liable for the first call or message to a consumer who did not provide consent. But the FCC has noted businesses will be liable for any further calls or text messages to a reassigned number, regardless of whether or when the business learns of the reassignment.

Click here to view the guidance.

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